In this report, we revisit our "Long Tail" thesis on the entertainment industry. As we wrote last year, digital technology and economics are loosening the barriers to entry in the video production business. In our view, this augurs a significant increase in supply of video content from many sources, which could lead to slowing growth for incumbents and a shift in value from content creators to aggregators/packagers of content in the middle of the supply chain that can best connect users’ individual tastes with theoretically infinite choice. This report delves further into this theme and addresses key questions we have received from investors and industry contacts on this topic.

How do consumers navigate a world of unlimited choice and find what they are looking for?

We think the "Paradox of Choice" will increase the value of "middlemen," or packagers of content that can appropriately filter out the noise and connect users with the content that appeals to their interests. This can be done through strong brands, editorial discretion, technology, and harnessing user recommendations.